BRINKER INTERNATIONAL, INC

Brinker International, Inc. operates within the casual dining segment of the restaurant industry, a highly competitive environment where the company competes with locally-owned restaurants as well as national and regional restaurant chains. The casual dining segment has not seen significant growth in customer traffic in recent years, and the company also faces competition from quick service and fast casual restaurants, grocery, deli and restaurant services convergence, and meal kit and food delivery providers. The company owns, develops, operates and franchises the Chili’s Grill & Bar and Maggiano’s Little Italy restaurant brands, with a global presence that includes restaurants in the United States, 27 other countries and two United States territories.

Primary competitors are not named individually in the filing, but the company states it competes primarily on the quality, variety and value perception of menu items, as well as the quality and efficiency of service, the attractiveness of facilities and the effectiveness of advertising and marketing programs. The company believes its focus on five core equities—burgers, fajitas, Chicken Crispers, margaritas, and the Triple Dipper—along with simplifying its menu and maintaining its Chilihead culture and hospitality, allows Chili’s to differentiate its high-quality food and service from other casual dining restaurants. As of June 25, 2025, the system of Company-owned and franchise-operated restaurants included 1,628 restaurants, with Chili’s representing 1,576 of those and Maggiano’s representing 52.

The company generates revenue through two primary streams: Company sales, which include revenues from the operation of Company-owned restaurants including food and beverage sales net of discounts, Maggiano’s banquet service charge income, delivery, gift card breakage, digital entertainment revenues, merchandise income, and are net of gift card discount costs from third-party gift card sales; and Franchise revenues, which include royalties, franchise advertising fees, franchise and development fees, and other service fees. In fiscal 2025, Company sales were $5,335.3 million ¹ and Franchise revenues were $48.9 million ², with total revenues of $5,384.2 million ³. The company’s primary customer segments are Millennial families and Gen Z for Chili’s, and guests from affluent households for Maggiano’s.

The Chili’s segment operates within the full-service casual dining segment and includes Company-owned restaurants principally located in the United States, Canadian Company-owned restaurants, and royalties and fees from franchised locations in the United States, 27 other countries and two United States territories. In fiscal 2025, Chili’s Company sales were $4,834.8 million ⁴ and Franchise revenues were $48.1 million ⁵, with total revenues of $4,882.9 million ⁶. Chili’s average annual net sales per Company-owned restaurant during fiscal 2025 was $4.5 million ⁷, and the average revenue per meal was approximately $21.90 per guest ⁸. Food and non-alcoholic beverage sales accounted for 90.7% ⁹ of Chili’s Company sales in fiscal 2025. The Maggiano’s segment includes Company-owned restaurants in the United States and royalties and fees from its domestic franchise business. In fiscal 2025, Maggiano’s Company sales were $500.5 million ¹⁰ and Franchise revenues were $0.8 million ¹¹, with total revenues of $501.3 million ¹². Maggiano’s average annual sales per restaurant in fiscal 2025 was $9.9 million ¹³ and the average revenue per meal was approximately $39.06 per guest ¹⁴. Sales from events at its banquet facilities made up 14.7% ¹⁵ of Maggiano’s Company sales in fiscal 2025.

During fiscal 2025, the company continued to develop its restaurant brands domestically through the opening of new Company-owned restaurants, opening 5 ¹⁶ domestic Company-owned Chili’s restaurants and permanently closing 13 ¹⁷ Company-owned Chili’s and one ¹⁸ Company-owned Maggiano’s restaurant. Franchise-operated openings during fiscal 2025 included 3 ¹⁹ domestic Chili’s, 30 ²⁰ international Chili’s, and 1 ²¹ domestic Maggiano’s. The company entered into two ²² new development arrangements, both with new franchise partners. In October 2024, the $350.0 million ²³ of 5.00% senior notes matured and were repaid in full using borrowings under the revolving credit facility. On May 1, 2025, the company amended its $900.0 million ²⁴ revolving credit facility to increase the capacity to $1.0 billion ²⁵. The company repurchased 1.0 million ²⁶ shares of its common stock for $76.0 million ²⁷ in fiscal 2025 under its share repurchase program. Subsequent to fiscal 2025 year end, the Board of Directors authorized an additional $400.0 million ²⁸ under the share repurchase program, allowing for a total available authority of $507.0 million ²⁹. In fiscal 2025, the company implemented a new enterprise resource planning system that encompasses human capital management.

Total revenues increased to $5,384.2 million ³⁰ in fiscal 2025 from $4,415.1 million ³¹ in fiscal 2024, driven primarily by a $965.3 million ³² increase from comparable restaurant sales. Operating income improved to $512.0 million ³³ from $229.6 million ³⁴ in the prior year, and net income rose to $383.1 million ³⁵ from $155.3 million ³⁶. Diluted net income per share was $8.32 ³⁷ compared to $3.40 ³⁸ in fiscal 2024. Net cash provided by operating activities increased to $679.0 million ³⁹ from $421.9 million ⁴⁰ in the prior year.

A primary growth vector is the continued development of Company-owned restaurants in strategically desirable markets, with a focus on major metropolitan areas and smaller market areas, as well as partnerships with franchisees to enter non-traditional locations such as airports. For fiscal 2026, the company projects opening 7 ⁴¹ domestic Company-owned Chili’s restaurants. The company also plans to relocate one ⁴² Maggiano's in fiscal 2026. International growth is driven by development agreements with new and existing franchise partners, with 18 ⁴³ active development arrangements as of June 25, 2025. For fiscal 2026, the company projects franchise-operated openings of 2-4 ⁴⁴ domestic Chili’s, 24-28 ⁴⁵ international Chili’s, and 0 ⁴⁶ domestic Maggiano’s, for total projected franchise openings of 26-32 ⁴⁷.

The company’s growth strategy also emphasizes a seamless digital experience, including investments in technology and off-premise options such as To-Go and delivery through partners DoorDash, Uber Eats and Grubhub, Google Food Ordering, or by calling the restaurant directly. In dining rooms, the company uses tabletop devices for payment and guest feedback, and servers use handheld tablets to place orders. The My Chili’s program offers free chips and salsa or a non-alcoholic beverage to members any time they visit and allows communication through email and text.

The filing does not contain a specific margin or cost outlook for the upcoming period. However, the company discusses that it has increased menu pricing in other areas in light of inflationary challenges and has improved menu offerings to incentivize guests to purchase higher-priced items. The company also notes that it continues to focus on cash flow generation and maintaining a solid and flexible financial position.

The company’s operational outlook includes a focus on supply chain and quality assurance, with approved suppliers and restaurants required to adhere to strict product and safety specifications. The company strategically negotiates directly with major suppliers to obtain competitive prices and uses purchase commitment contracts when appropriate to stabilize pricing associated with certain commodity items. The company believes its information systems are sufficient to support its business and continually seeks to improve processes based on strategic and financial priorities. As of June 25, 2025, the company had 83,840 ⁴⁸ team members, including 667 ⁴⁹ restaurant support center team members and 5,069 ⁵⁰ restaurant management team members.

Capital allocation priorities include share repurchases, with $107.0 million ⁵¹ of authorized repurchases remaining under the share repurchase program as of June 25, 2025, and an additional $400.0 million ⁵² authorized subsequent to year end. The company did not declare any dividends in fiscal 2025 or fiscal 2024. Capital expenditures for property and equipment were $265.3 million ⁵³ in fiscal 2025, compared to $198.9 million ⁵⁴ in fiscal 2024. The company incurred and capitalized $3.6 million ⁵⁵ of debt issuance costs associated with the revolving credit facility during fiscal 2025.

The company faces headwinds from macroeconomic challenges including inflation on wages and food and beverage costs, which have impacted operating results. Geopolitical and other macroeconomic events have led to wage inflation, staffing challenges, product cost inflation and disruptions in the supply chain. The company also notes that changes in U.S. trade policy and retaliatory measures by global trade partners may lead to increased consumer prices and a reduction in discretionary income, which could negatively affect consumer spending on dining out. The company is experiencing an increasingly tight and competitive labor market, which may continue to result in higher labor costs, increased turnover, and a shortage of adequate management personnel and hourly team members.

The company faces constraints from the high concentration of Company-owned restaurants in Texas, Florida and California, comprising 18.9% ⁵⁶, 11.8% ⁵⁷ and 9.2% ⁵⁸, respectively, as of June 25, 2025, making it particularly susceptible to adverse trends and economic conditions in those states. Additionally, the company is subject to extensive federal, state, local and international laws and regulations, including those related to minimum wage, with some states and localities contemplating increases that can have a significant impact on labor costs. The company also faces risks related to its ability to continue to grow sales through delivery orders and digital commerce, as it relies on third-party delivery providers and their independent contractor drivers.

The company faces material risks from its inability to successfully design and execute a business strategy plan, which could adversely affect gross sales and profitability, and this risk is dependent on factors including increasing gross sales and operating profits at existing restaurants, evolving marketing and branding strategies, and innovating technology initiatives. Changes in consumer preferences, including health or dietary preferences, may decrease demand for food at its restaurants, and the company may not be able to adequately adapt its menu offerings to keep pace. Food safety incidents at its restaurants or in its supply chain could irreparably damage brand reputations and result in declines in guest traffic and sales, and the company depends heavily on the Chili’s brand for a majority of its revenues. The company is exposed to risks related to cybersecurity and protection of confidential information, and failure to protect the integrity and security of payment card or individually identifiable information could damage its reputation and expose it to loss of revenues, increased costs and litigation. The company’s business could be adversely affected by its inability to respond to or effectively manage social media, as negative comments or the dissemination of false information can be immediate and have a material adverse impact. The company recognized $4.6 million ⁵⁹ of long-lived asset and liquor license impairment charges in fiscal 2025, and changes to estimates related to property and equipment or operating results lower than current estimates may cause future impairment charges.

Management’s message emphasizes a commitment to strategies and a Company culture that will grow sales, increase profits, bring back guests and engage team members, with a focus on strengthening the company’s position in casual dining and growing its core business over time. The forward-looking statements in the filing are accompanied by cautionary language regarding risks and uncertainties, and the company undertakes no obligation to update forward-looking statements. The strategic priorities emphasized include making work at Chili’s easier, more fun and more rewarding for team members by eliminating unnecessary tasks and simplifying the menu to focus on core equities; improving hospitality by scheduling more team members per shift and improving systems and technology for order accuracy and guest experience; and maintaining a flexible platform of value offerings, such as the “3 for Me” platform starting at just $10.99 ⁶⁰, which management believes will continue to be an important traffic driver in the current economic circumstances.